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Aon (AON) 4Q Earnings Rise 10 Pct, Beat Estimates

 February 01, 2013 07:37 AM


(By Balaseshan) Global insurance broker Aon Plc (NYSE: AON) reported a 10% increase in quarterly earnings driven by a higher rate of organic revenue growth across each segment, and strong free cash flow growth. Results exceeded Street's expectations.

Profit from continuing operations for the fourth quarter were $305 million or $0.95 per share, up from $277 million or $0.84 per share last year. Earnings per share (EPS) from continuing operations rose to $1.27 from $1.16.

Total revenue increased 4% to $3.12 billion, driven by a 4% rise in organic revenue, partially offset by a 50% drop in investment income due to lower average interest rates.

[Related -Analysts' Upgrades And Downgrades: INTC, SNDK, TXN, MO, ATML, AON, CL, ADM]

Analysts, on average, polled by Thomson Reuters had expected a profit of $1.26 per share on revenue of $3.07 billion for the fourth quarter.

Risk solutions revenue rose 2% to $2.1 billion, due to 3% organic growth in commissions and fees partially offset by a 50% drop in investment income. Retail Brokerage organic revenue increased 3% reflecting revenue growth in both the Americas and International businesses.

HR solutions revenue increased 7% to $1.1 billion, due to 6% organic growth in commissions and fees and a 1% favorable impact from acquisitions, net of divestitures.

Organic revenue in Consulting Services grew 8% driven primarily by solid growth across all businesses. Organic revenue in Outsourcing rose 6% due primarily to strong growth in healthcare exchanges and net new client wins and demand for discretionary services in HR BPO.

[Related -Aon (AON) Downgraded To 'Hold' By Deutsche Bank; PT Lowered To $52]

"As we look ahead to 2013, we have positioned our industry-leading platform for solid long-term growth, improved operational performance, strong free cash flow growth and effective capital management," said Greg Case, president and chief executive officer.

AON closed Thursday's regular session up 0.03% at $57.74. The stock has been trading between $45.04 and $58.43 for the past 52 weeks.

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